What are Digital Signatures ?

What are Digital Signatures?

We are moving from paper to paperless office. Now instead of doing manual work we use computers. With online submission of documents and their mandatory maintenance in electronic form digital signatures have become much more important. For every return filing or official communication with various government departments and ministries, digital signatures are used. Like manual signatures, digital signatures provide authenticity and credibility to a document.

But what exactly is a digital signature. A digital signature is a unique code generated by the computer which when attached to a document verifies the identity and details of the signatory. The code generated consists of all the information about the sender or signing person. Every digital signature is different from one another which can be verified by its pattern. It is specifically used while filing returns with tax authorities as Government has made electronic filing compulsory.

Is it secure?

Now the question arises as to how we'll know whether the digital signature belongs to the authorized signatory and that there hasn't been any duplication? Another concern that arises is whether the document can be modified after it has been digitally signed? To prevent duplication and frauds, every signature is encrypted.

To provide additional security validity of a digital signature has been restricted to one per document. That means if you put a digital signature on a document then that document cannot be edited or modified. In case there is a need to update it, then original digital signature will be invalidated and a new one will be required.

Use of digital signatures under Companies Act, 2013

Digital signatures are an undistinguished part of online submission of documents. Whether its registration of private limited company or filing of income tax without them submission cannot be done. As per the Act almost every form is to be submitted online. It also mandates digital signing of statutory registers and share certificates. Various other provisions of the Act too require maintenance of books of accounts and other documents in electronic form which requires digital signature.

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